Interior component supplier Grammer AG has reported an increase in turnover in 2005, but a fall in profits.

Overall turnover grew EUR32m to EUR858m. This consisted of EUR564m (+EUR20m) in the automotive division and EUR300m (+EUR12m) in the seating division.

Earnings before interest and tax (EBIT) were below last year's level at EUR32m (-EUR8m on a year earlier) due to rising raw material prices, weak passenger seating sales and new product development costs, as well as the cost of five new production locations in Germany and China.

For 2006 Grammer expects a cost reduction programme announced in autumn 2005 to start delivering results. In particular, union agreements expected imminently will allow a reduction in personnel costs for two German plants.

Grammer will announce its full 2005 results on 30 March.